Yelp Fights Fraud Allegations by Unfiltering Reviews

Yelp still defaults to showing approved reviews (although you can now see what it filters out), and no longer allows businesses to pay to surface a favorable review.

Local businesses have complained for years that Yelp’s powerful recommendation engine unfairly pressures them into paying to remove negative reviews and highlight positive ones, but the company has always steadfastly denied that its allegedly aggressive sales force made a practice of strong-arming businesses into paying up.

On Tuesday, Yelp responded by altering its reviews policy, relenting on two fronts in an effort to fight the perception — and civil court allegations — that businesses which pay Yelp for ads receive more favorable treatment than those who do not.

First, Yelp will no longer charge businesses for the ability to designate a positive comment as a “Favorite Review,” which highlighted it and brought it to the top of the heap. This eliminated feature, which appeared to affect the site’s perceived objectivity (businesses that paid Yelp appeared to have better reputations than nonpayers), was part of a Yelp advertising package until this week, the company announced on Tuesday (updated after press conference).

Second, Yelp now shows users every review posted about a given business, including those reviews that the company’s filtering algorithm or staff remove because they were thought to be fraudulent. If you want to see a version of Yelp that contains all of the duplicate, enthusiastic reviews from restaurant owners and their personal friends and family, as well as negative reviews from competing business owners, you can view the filtered version of the list using a link near the bottom of the search results screen (updated).

Stories have bubbled up around the country over the past few years about Yelp essentially blackmailing local businesses into paying for a more favorable reputation, and the company always denied wrongdoing. The situation came to a head when a February class action lawsuit accused the Yelp of running “an extortion scheme” that forced businesses to pay up or see their online reputations besmirched, which likely led to Yelp taking these steps, although the company downplayed any connection between the lawsuits and these changes.

During a press conference on Tuesday, we asked Yelp CEO Jeremy Stoppelman whether Yelp has ever accepted payment in return for deleting negative reviews or burying them at the bottom of a list, as has been rumored. He said those rumors are false.

“That’s part of what we hope to dispel by unveiling reviews that have been covered, so you can see that the review filters take action on all types of suspicious content — both reviews that may have been written by a business owner or a business owner’s friends, as well as negative reviews potentially written by a competitor,” said Stoppelman.

“We’ve never buried reviews for payment.”

A single well-written, popular, negative review can spell doom for a local business.

Stoppelman added that the Favorite Review feature allowing businesses to surface a positive review was the only place on the site where payment affected content. In order to “take this out of the conversation,” as of today, Yelp has gotten rid of it.

“Despite our best efforts to educate consumers and the small business community, myths about Yelp have persisted. We’ve said all along we believe these incorrect notions stem from the combination of the filter and this advertising feature — and we’re practicing what we preach,” he wrote on last night’s blog post.

“Lifting the veil on our review filter and doing away with ‘Favorite Review’ will make it even clearer that displayed reviews on Yelp are completely independent of advertising — or any sort of manipulation. We also hope it will demonstrate the importance of a safeguard such as our filter and the unique challenge we face daily to maintain the integrity of the review content on our site.”

It’s a tough job, since so many parties have incentive to rig the game. And the stakes are high. In the early days of the internet, a bad review on a site like Yelp only kept a few geeks away, but these days, everyone seems to check online before they buy something, even if that something is a bagel with cream cheese. A single well-written, popular, negative review can spell doom for a local business. In order to incorporate the concerns of the business owner community before they balloon into another class action lawsuit, Yelp also announced last night that it has created a Small Business Advisory Council consisting of representative local businesses to advise it going forward.

Why change now? Stoppelman said the changes don’t have much to do with the ongoing class action lawsuit from local businesses, although legal advice might have something to do with that stance. But there’s also the matter of Google reportedly having expressed interest in buying Yelp to augment its own local reviews offerings, and no company with the motto “Don’t be evil” wants to look like it is building a business on extorting small businesses.